Rethinking service design

As we enter a period of sustained financial austerity, local authorities must rethink the design of their activities to avoid deep cuts to front-line services.

One solution may lie in commissioning for outcomes - paying on performance rather than purchasing inputs, as the 2020 Trust argued in its Better Outcomes report.

Such commissioning has the support of both the government and Opposition, and is being rolled out in welfare to work.

The concept probably has wider application in local government, as authorities seek better ways of managing repeat offenders, people with long-term health conditions, and improving recycling rates.

There have been some interesting pilots in long-term disease management by primary care trusts in Newham and Birmingham.

Woking BC (see box below) is managing an outcome-based contract for street-scene services.

The US federal government and some state governments have had success with outcome commissioning in foster care, aiming at a higher rate of placements and reduced turnover.

And financially stressed US states are experimenting with ‘benefits-based funding’, paying for the transformation of back-office services based on delivery of outcomes.

There are challenges associated with outcome commissioning - setting ambitious but measurable targets, giving providers control over the range of variables necessary to deliver the outcomes, establishing realistic baselines from which to measure improvement, anticipating change and harnessing entrepreneurial responses.

A major challenge lies in overcoming the traditional siloed approach to service delivery. Strategic commissioning and Total Place point to recognition of the massive waste associated with fragmented delivery.

Outcome commissioning can ensure that commissioners are agreed on desired outcomes and stimulating providers, public and private, to explore innovative linkages between inputs and outcomes.

Better Outcomes argues that in some public services, commissioning for outcomes may offer an effective tool for transformation, driving substantial value-for-money improvements while focusing on core objectives. However, such an approach will need resolute leadership from politicians, managers and procurement professionals.

Gary Sturgess, executive director, Serco, author of Better Outcomes and former cabinet secretary, New South Wales Government

» Read it here: Local Government Chronicle

AddThis